How your favourite lo­cal cof­fee shop is driv­ing house prices

Herald Sun - Property - - FRONT PAGE - PE­TER FARAGO

MEL­BUR­NI­ANS’ de­sire to find good cof­fee hang­outs is rub­bing off on prop­erty prices.

A re­port has high­lighted what home­buy­ers were pre­pared to pay to en­joy Mel­bourne’s vil­lage life­style.

The Econ­omy of Shop­ping Small Re­port, com­mis­sioned by Amer­i­can Ex­press, has shown home­buy­ers were will­ing to spend al­most $30,500 more to live close to a shop­ping vil­lage.

The av­er­age in­crease in the me­dian price for homes close to shop­ping vil­lages in Mel­bourne was $178 per small busi­ness, the re­port found.

Sub­urbs with dou­ble the num­ber of small busi­nesses had a 10 per cent higher me­dian price, when com­pared with sub­urbs with a sim­i­lar pop­u­la­tion den­sity and dis­tance to the CBD.

WBP Prop­erty chief ex­ec­u­tive Gre­ville Pabst said homes closer to shop­ping vil­lages had bet­ter cap­i­tal growth be­cause they were also closer to train sta­tions, tram and bus stops.

“There’s a strong cor­re­la­tion be­tween the life­style of the vil­lage, the cof­fee, and prop­erty val­ues,” Mr Pabst said.

“It’s the trans­port, be­ing close to a beach­side vil­lage, or a trendy restau­rant, a cafe or a quirky book­shop,” he said.

“It’s those life­style at­tributes that peo­ple de­sire — like to be able to go down and read the pa­per and have break­fast — that is re­ally im­por­tant for peo­ple when they’re buy­ing prop­erty.”

Mr Pabst said the best homes were off the strip, still within walk­ing dis­tance but not af­fected by traf­fic noise or from venues such as pubs.

He lists pop­u­lar vil­lages like Or­mond Rd, El­wood; Gre­ville St, Prahran and An­der­son St, Yar­rav­ille. While some were big, like Glen­fer­rie Rd, Hawthorn or Syd­ney Rd, Brunswick, Mr Pabst said oth­ers were small, like Rath­downe St, Carl­ton.

Rob El­som, who is di­rec­tor of Hock­ing Stu­art of­fices across Mel­bourne’s north­ern city fringe, said buy­ers paid a 10 to 15 per cent premium for homes close to strips like West­garth vil­lage, on High St, North­cote, where the me­dian price was $990,000, ac­cord­ing to CoreLogic RP Data.

Mr El­som said new res­i­dents and new busi­nesses were help­ing the vil­lages evolve.

“Footscray is a good ex­am­ple. It’s slowly evolv­ing,” he said.

“You drive around Footscray and see lit­tle holes in the walls with a be­spoke cof­fee shop with four chairs out the front and that’s where it all starts. Next thing one of the big-name chefs opens a bar there and it’s chang­ing and off we go.”

Mr El­som said there were some emerg­ing vil­lages to keep an eye on.

“Near Miller St, Thorn­bury. One side of the street is Thorn­bury, on the other side it’s Pre­ston. There’s a pri­mary school nearby, the shop­ping strip and a tram runs straight through. Any­where near there is go­ing to be red hot in two years’ time,” he said.

Mr El­som said Buckley St, Footscray was worth a look.

“My ad­vice is to be lit­er­ally 250m away from that main strip,” he said.

“Make sure you buy a pe­riod home, be­cause you gen­er­ally find that 80 per cent of buy­ers are look­ing for a pe­riod home.

“Park your­self in it, get a feel­ing for the area and do a ren­o­va­tion be­cause in five years’ time you’ll thank your lucky stars that you did.”

West­pac gen­eral man­ager of small and medium en­ter­prises, Julie Ryn­ski said the ben­e­fits small busi­nesses de­liv­ered were far reach­ing.

“Whether it’s pro­vid­ing per­sonal ser­vice, di­ver­sity of prod­ucts that are unique, or adding value to sub­urb pro­files and prop­erty prices, they are con­tribut­ing to the fab­ric of our lo­cal com­mu­ni­ties,” she said.

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